Consumer agency has done well

With the Consumer Financial Protection Bureau approaching its one-year anniversary on July 21, I looked back at the agency's rookie year.

Michelle Singletary

With the Consumer Financial Protection Bureau approaching its one-year anniversary on July 21, I looked back at the agency's rookie year.

Overall, I would say the consumer watchdog gets a "meets expectations" in its evaluation for accomplishing its primary goal of becoming an unapologetic protector of consumers.

The bureau was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping overhaul of financial regulations in decades. It was charged with promoting financial education and enforcing federal consumer financial-protection laws. It was given rule-making powers so that it could head off unfair, deceptive and abusive financial practices and products.

This first year, the agency has done a lot of fact-finding. The agency has asked the public - consumers, the financial services industry and consumer advocates - to weigh in on a number of issues from credit cards to credit reporting agencies to student loans to mortgages.

Perhaps the agency has become best known for its "Know Before You Owe" initiative, a project that aims to help people understand the consequences of the debt they take on. It's a campaign that could have the biggest impact long term.

Had more people understood the consequences of their borrowing and recognized and avoided the predatory practices used to get them to dig a debt hole they couldn't get out from under, we wouldn't have had the housing meltdown. The Know Before You Owe initiative isn't just about blaming the financial industry or even shifting all the responsibility onto the companies. It's about making sure people have all the information they need to make better financial decisions.

There's a whistle-blower hot line where employees, contractors, vendors and competing companies can confidentially report suspected violations of federal consumer financial laws. The toll-free number is (855) 695-7974. You can also send information to whistleblower@cfpb.gov.

So far, the agency hasn't caused havoc to our economy despite warnings from Republican lawmakers who tried to block the appointment of a director, absurdly arguing that the consumer bureau was too powerful. In a letter to President Barack Obama last year, Republicans said the agency would negatively affect every American household "by limiting their choices when purchasing financial products, restricting the availability of credit to consumers, and increasing the cost of goods or services purchased using credit."

Duh. The point of the agency is to help people see their financial limits, and that might mean it will restrict the credit available to them. It should. If the agency imposes regulation that curbs abusive and deceptive practices, we all are better off, including the companies that do the right thing.

Contact Michelle Singletary, a personal finance columnist at The Washington Post, at singletarym@washpost.com.